IJM bags RM1.19 bil contract to upgrade Kuantan Port

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KUALA LUMPUR (Feb 26): IJM Corp Bhd announced that its wholly-owned subsidiary IJM Construction Sdn Bhd has bagged a RM1.19 billion contract from Kuantan Port Consortium Sdn Bhd (KPC) to construct New Deep Water Terminal (NDWT) at Kuantan Port, Pahang.

In an announcement to Bursa Malaysia this evening, IJM said it will take 36 months to complete the project.

IJM’s wholly-owned subsidiary Road Builder (M) Holdings Bhd has a 62% stake in KPC, with the Government of Malaysia holding a special rights share.

According to IJM’s website, KPC is given the concession period of thirty (30) years since 1998 to operate Kuantan Port. With the development of the NDWT, IJM said it will sign a new privatisation agreement for 30 years, with an option to extend another thirty 30 years.

IJM said in its website that Kuantan Port is located in the world’s major shipping lanes, connecting the Pacific Rims, Middle East, Far East, Europe, Asean and the west coast of United States.

It also said that Kuantan Port is ideal for a petrochemical hub, as well as a major container terminal for the east coast region.

The group added that it plans to expand the port to cater for ships up to 200,000 deadweight tonnage (DWT), with an expected operation to commence as early as 2016.

IJM (fundamental: 1.6; valuation: 2.4) added that with the expansion, the Kuantan Port is expected to increase its capacity throughput from 26 million freight-weight tonnes (FWT) to 56 million FWT, which could boost its annual container volume from 150,000 twenty-equivalent units (TEU) to 1.5 million TEU.

IJM ended 4 sen or 0.56% lower at RM7.10 today, giving it a market capitalisation of RM10.63 billion

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)